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Cinemark Holdings, Inc. Reports Results for the Second Quarter Of 2021

Delivered Substantial Reduction in Quarterly Net Loss and Significant Improvement in Cash Flows from Operations

Domestic Segment Generated Positive Adjusted EBITDA for First Time Since COVID Outbreak

Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three and six months ended June 30, 2021. As of June 30, 2021, the Company had reopened all 323 of its domestic theatres and 152 of its 198 international theatres, showing primarily new releases during reduced operating hours.

Cinemark Holdings, Inc.’s total revenues for the three months ended June 30, 2021 were $294.7 million compared to $9.0 million for the three months ended June 30, 2020. As a reminder, the Company’s theatres were closed for a majority of the three months ended June 30, 2020. For the three months ended June 30, 2021, admissions revenues were $153.5 million and concession revenues were $109.8 million. For the three months ended June 30, 2021, attendance was 19.1 million patrons, average ticket price was $8.04 and concession revenues per patron were $5.75.

Net loss attributable to Cinemark Holdings, Inc. for the three months ended June 30, 2021 was $142.5 million compared to $170.4 million for the three months ended June 30, 2020. Diluted loss per share for the three months ended June 30, 2021 was $1.19 compared to $1.45 for the three months ended June 30, 2020.

Adjusted EBITDA for the three months ended June 30, 2021 was $(11.8) million compared to $(117.6) million for the three months ended June 30, 2020. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

“I’m pleased to report that the second quarter recovery of our industry and business progressed at a faster rate than we expected with the North American industry box office more than tripling first quarter results,” stated Mark Zoradi, Cinemark CEO. “For Cinemark, the second quarter improved so materially that we were able to substantially reduce our net loss during the quarter and our domestic operations delivered positive Adjusted EBITDA for the first time since our theaters were forced to temporarily shut down last year.”

Mr. Zoradi continued, “While the recovery of Latin America continues to lag the U.S. by two to three months driven by the status of the virus, all data points and financial metrics are trending in the right direction. We remain confident in the global resurgence of theatrical exhibition as COVID-19 is contained. We have already witnessed this phenomenon in various parts of the world and we have now experienced it firsthand with North America’s second quarter box office results.”

Cinemark Holdings, Inc.’s total revenues for the six months ended June 30, 2021 were $409.0 million compared to $552.6 million for the six months ended June 30, 2020. For the six months ended June 30, 2021, admissions revenues were $209.6 million and concession revenues were $149.3 million. For the six months ended June 30, 2021, attendance was 26.8 million patrons, average ticket price was $7.81 and concession revenues per patron were $5.56. For the six months ended June 30, 2020, attendance was 45.8 million patrons, average ticket price was $6.39 and concession revenues per patron were $4.16.

Net loss attributable to Cinemark Holdings, Inc. for the six months ended June 30, 2021 was $350.7 million compared to $230.0 million for the six months ended June 30, 2020. Diluted loss per share for the six months ended June 30, 2021 was $2.94 compared to $1.96 for the six months ended June 30, 2020.

Adjusted EBITDA for the six months ended June 30, 2021 was $(103.8) million compared to $(51.4) million for the six months ended June 30, 2020. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.

As of June 30, 2021, the Company’s aggregate screen count was 5,864 and the Company had commitments to open five new theatres and 66 screens during the remainder of 2021 and twelve new theatres and 109 screens subsequent to 2021.

Conference Call/Webcast – Today at 8:30 AM ET

Telephone: via 800-374-1346 or 706-679-3149 (for international callers).

Live Webcast/Replay: Available live at https://investors.cinemark.com. A replay will be available following the call and archived for a limited time.

About Cinemark Holdings, Inc.

Headquartered in Plano, TX, Cinemark (NYSE: CNK) is one of the largest and most influential movie theatre companies in the world. Cinemark’s circuit, comprised of various brands that also include Century, Tinseltown and Rave, operates 521 theatres with 5,864 screens in 42 states domestically and 15 countries throughout South and Central America. Cinemark consistently provides an extraordinary guest experience from the initial ticket purchase to the closing credits, including Movie Club, the first U.S. exhibitor-launched subscription program; the highest Luxury Lounger recliner seat penetration among the major players; XD - the No. 1 exhibitor-brand premium large format; and expansive food and beverage options to further enhance the moviegoing experience. For more information go to https://investors.cinemark.com/.

Forward-looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The “forward-looking statements” include our current expectations, assumptions, estimates and projections about our business and our industry. They include statements relating to future revenues, expenses and profitability, the future development and expected growth of our business, projected capital expenditures, attendance at movies generally or in any of the markets in which we operate, the number or diversity of popular movies released and our ability to successfully license and exhibit popular films, national and international growth in our industry, competition from other exhibitors and alternative forms of entertainment and determinations in lawsuits in which we are defendants. You can identify forward-looking statements by the use of words such as “may,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future” and “intends” and similar expressions which are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict, including, among others, the impacts of COVID-19. Such risks and uncertainties could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. In evaluating forward-looking statements, you should carefully consider the risks and uncertainties described in the “Risk Factors” section or other sections in the Company’s Annual Report on Form 10-K filed February 26, 2021 and the Current Report on Form 8-K filed March 4, 2021. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements and risk factors. Forward-looking statements contained in this press release reflect our view only as of the date of this press release. We undertake no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Cinemark Holdings, Inc.

Financial and Operating Summary

(unaudited, in thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Statement of income data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Admissions

 

$

153,479

 

 

$

37

 

 

$

209,600

 

 

$

292,499

 

Concession

 

 

109,814

 

 

 

124

 

 

 

149,302

 

 

 

190,480

 

Other

 

 

31,359

 

 

 

8,813

 

 

 

50,111

 

 

 

69,611

 

Total revenues

 

 

294,652

 

 

 

8,974

 

 

 

409,013

 

 

 

552,590

 

Cost of operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Film rentals and advertising

 

 

76,587

 

 

 

388

 

 

 

99,792

 

 

 

157,005

 

Concession supplies

 

 

18,847

 

 

 

2,379

 

 

 

25,987

 

 

 

37,191

 

Salaries and wages

 

 

50,407

 

 

 

8,864

 

 

 

81,573

 

 

 

96,408

 

Facility lease expense

 

 

67,213

 

 

 

65,202

 

 

 

132,042

 

 

 

147,443

 

Utilities and other

 

 

61,185

 

 

 

34,871

 

 

 

110,329

 

 

 

135,394

 

General and administrative expenses

 

 

37,332

 

 

 

28,001

 

 

 

73,190

 

 

 

69,019

 

Depreciation and amortization

 

 

66,920

 

 

 

63,581

 

 

 

135,080

 

 

 

128,837

 

Impairment of long-lived assets

 

 

 

 

 

 

 

 

 

 

 

16,619

 

Restructuring costs

 

 

(740

)

 

 

19,538

 

 

 

(948

)

 

 

19,538

 

Loss on disposal of assets and other

 

 

2,358

 

 

 

425

 

 

 

6,863

 

 

 

2,330

 

Total cost of operations

 

 

380,109

 

 

 

223,249

 

 

 

663,908

 

 

 

809,784

 

Operating loss

 

 

(85,457

)

 

 

(214,275

)

 

 

(254,895

)

 

 

(257,194

)

Interest expense

 

 

(37,034

)

 

 

(31,041

)

 

 

(73,587

)

 

 

(55,707

)

Interest income

 

 

3,828

 

 

 

803

 

 

 

4,474

 

 

 

2,887

 

Loss on extinguishment of debt

 

 

(3,924

)

 

 

 

 

 

(6,527

)

 

 

 

Foreign currency exchange gain (loss)

 

 

2,327

 

 

 

916

 

 

 

(647

)

 

 

(3,932

)

Distributions from NCM

 

 

 

 

 

690

 

 

 

77

 

 

 

5,914

 

Interest expense - NCM

 

 

(5,962

)

 

 

(5,934

)

 

 

(11,797

)

 

 

(11,825

)

Equity in loss of affiliates

 

 

(8,109

)

 

 

(20,120

)

 

 

(14,915

)

 

 

(11,634

)

Loss before income taxes

 

 

(134,331

)

 

 

(268,961

)

 

 

(357,817

)

 

 

(331,491

)

Income taxes

 

 

7,950

 

 

 

(98,145

)

 

 

(6,693

)

 

 

(101,253

)

Net loss

 

$

(142,281

)

 

$

(170,816

)

 

$

(351,124

)

 

$

(230,238

)

Less: Net income (loss) attributable to noncontrolling interests

 

 

186

 

 

 

(427

)

 

 

(416

)

 

 

(258

)

Net loss attributable to Cinemark Holdings, Inc.

 

$

(142,467

)

 

$

(170,389

)

 

$

(350,708

)

 

$

(229,980

)

Loss per share attributable to Cinemark Holdings, Inc.'s common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(1.19

)

 

$

(1.45

)

 

$

(2.94

)

 

$

(1.96

)

Diluted

 

$

(1.19

)

 

$

(1.45

)

 

$

(2.94

)

 

$

(1.96

)

Weighted average shares outstanding - Diluted

 

 

117,225

 

 

 

116,666

 

 

 

117,200

 

 

 

116,581

 

 

Other Operating Data

(unaudited, in thousands)

 

As of

 

As of

 

June 30,

 

December 31,

 

2021

 

2020

Balance sheet data:

 

 

 

 

 

Cash and cash equivalents

$

595,884

 

$

655,338

Theatre properties and equipment, net

$

1,492,564

 

$

1,615,062

Total assets

$

5,212,818

 

$

5,562,922

Long-term debt, including current portion, net of unamortized debt discounts and debt issue costs

$

2,499,536

 

$

2,395,218

Equity

$

397,738

 

$

798,969

 

Segment Information

(unaudited, in millions, except per patron data)

 

 

U.S. Operating Segment

 

International Operating Segment

 

Consolidated

 

Three Months Ended

June 30,

 

Three Months Ended

June 30,

 

Three Months Ended

June 30,

Revenues

2021

 

2021

 

2021

Admissions revenues

$

140.6

 

$

12.9

 

$

153.5

Concession revenues

$

99.4

 

$

10.4

 

$

109.8

Other revenues

$

29.3

 

$

2.0

 

$

31.3

Total revenues

$

269.3

 

$

25.3

 

$

294.6

Attendance

 

15.1

 

 

4.0

 

 

19.1

Average ticket price

$

9.33

 

$

3.21

 

$

8.04

Concession revenues per patron

$

6.59

 

$

2.60

 

$

5.75

 
 

 

U.S. Operating Segment

 

International Operating Segment

 

Consolidated

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

June 30,

 

June 30,

 

June 30,

Cost of Operations

2021

 

2020

 

2021

 

2020

 

Constant

Currency (1)

2021

 

2021

2020

Film rentals and advertising

$

70.3

 

$

0.2

 

$

6.3

 

$

0.2

 

$

6.6

 

$

76.6

$

0.4

Concession supplies

$

16.1

 

$

1.5

 

$

2.7

 

$

0.9

 

$

2.7

 

$

18.8

$

2.4

Salaries and wages

$

43.5

 

$

3.4

 

$

6.9

 

$

5.4

 

$

7.2

 

$

50.4

$

8.8

Facility lease expense

$

59.9

 

$

59.8

 

$

7.3

 

$

5.4

 

$

7.3

 

$

67.2

$

65.2

Utilities and other

$

52.9

 

$

28.8

 

$

8.3

 

$

6.1

 

$

8.5

 

$

61.2

$

34.9

 
 

 

U.S. Operating Segment

 

International Operating Segment

 

Consolidated

 

Six Months Ended June 30,

 

Six Months Ended June 30,

 

Constant

Currency (1)

 

Six Months Ended June 30,

Revenues

2021

 

2020

 

2021

 

2020

 

2021

 

2021

 

2020

Admissions revenues

$

189.1

 

$

232.3

 

$

20.5

 

$

60.2

 

$

21.9

 

$

209.6

 

$

292.5

Concession revenues

$

132.4

 

$

152.8

 

$

16.9

 

$

37.7

 

$

17.8

 

$

149.3

 

$

190.5

Other revenues

$

44.9

 

$

50.4

 

$

5.2

 

$

19.2

 

$

6.0

 

$

50.1

 

$

69.6

Total revenues

$

366.4

 

$

435.5

 

$

42.6

 

$

117.1

 

$

45.7

 

$

409.0

 

$

552.6

Attendance

 

20.3

 

 

27.9

 

 

6.5

 

 

17.9

 

 

 

 

 

26.8

 

 

45.8

Average ticket price

$

9.31

 

$

8.33

 

$

3.15

 

$

3.36

 

$

3.36

 

$

7.81

 

$

6.39

Concession revenues per patron

$

6.52

 

$

5.48

 

$

2.59

 

$

2.11

 

$

2.73

 

$

5.56

 

$

4.16

 
 

 

U.S. Operating Segment

 

International Operating Segment

 

Consolidated

 

Six Months Ended

 

Six Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

June 30,

Cost of Operations

2021

 

2020

 

2021

 

2020

 

Constant

Currency (1)

2021

 

2021

 

2020

Film rentals and advertising

$

89.6

 

$

128.2

 

$

10.2

 

$

28.8

 

$

11.0

 

$

99.8

 

$

157.0

Concession supplies

$

21.6

 

$

27.1

 

$

4.4

 

$

10.1

 

$

4.6

 

$

26.0

 

$

37.2

Salaries and wages

$

68.4

 

$

74.6

 

$

13.2

 

$

21.8

 

$

14.4

 

$

81.6

 

$

96.4

Facility lease expense

$

118.9

 

$

125.2

 

$

13.1

 

$

22.2

 

$

13.6

 

$

132.0

 

$

147.4

Utilities and other

$

92.9

 

$

103.8

 

$

17.4

 

$

31.6

 

$

19.0

 

$

110.3

 

$

135.4

(1)

Constant currency amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2020. We translate the results of our international operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign currency exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.

Other Segment Information

(unaudited, in thousands)

 
 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Adjusted EBITDA (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

519

 

 

$

(96,252

)

 

$

(76,478

)

 

$

(40,180

)

International

 

 

(12,340

)

 

 

(21,366

)

 

 

(27,293

)

 

 

(11,227

)

Total Adjusted EBITDA (1)

 

$

(11,821

)

 

$

(117,618

)

 

$

(103,771

)

 

$

(51,407

)

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

11,483

 

 

$

11,028

 

 

$

25,124

 

 

$

36,701

 

International

 

 

3,656

 

 

 

1,788

 

 

 

7,695

 

 

 

10,258

 

Total capital expenditures

 

$

15,139

 

 

$

12,816

 

 

$

32,819

 

 

$

46,959

 

 

(1)

Adjusted EBITDA represents net income before income taxes, depreciation and amortization expense and other items, as calculated below. Adjusted EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net income as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance and liquidity, estimate our value and evaluate our ability to service debt. In addition, we use Adjusted EBITDA for incentive compensation purposes.

Reconciliation of Adjusted EBITDA

(unaudited, in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net income (loss)

 

$

(142,281

)

 

$

(170,816

)

 

$

(351,124

)

 

$

(230,238

)

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

7,950

 

 

 

(98,145

)

 

 

(6,693

)

 

 

(101,253

)

Interest expense

 

 

37,034

 

 

 

31,041

 

 

 

73,587

 

 

 

55,707

 

Other expense, net (a)

 

 

7,914

 

 

 

24,335

 

 

 

22,885

 

 

 

24,504

 

Distributions from DCIP (b)

 

 

 

 

 

5,222

 

 

 

 

 

 

10,383

 

Cash distributions from other equity investees (c)

 

 

 

 

 

1,456

 

 

 

156

 

 

 

12,901

 

Depreciation and amortization

 

 

66,920

 

 

 

63,581

 

 

 

135,080

 

 

 

128,837

 

Impairment of long-lived assets

 

 

 

 

 

 

 

 

 

 

 

16,619

 

Restructuring costs

 

 

(740

)

 

 

19,538

 

 

 

(948

)

 

 

19,538

 

Loss on disposal of assets and other

 

 

2,358

 

 

 

425

 

 

 

6,863

 

 

 

2,330

 

Loss on extinguishment of debt

 

 

3,924

 

 

 

 

 

 

6,527

 

 

 

 

Non-cash rent

 

 

(807

)

 

 

1,424

 

 

 

(679

)

 

 

833

 

Share based awards compensation expense (d)

 

 

5,907

 

 

 

4,321

 

 

 

10,575

 

 

 

8,432

 

Adjusted EBITDA

 

$

(11,821

)

 

$

(117,618

)

 

$

(103,771

)

 

$

(51,407

)

 

(a)

Includes interest income, foreign currency exchange loss, interest expense – NCM and equity in income (loss) of affiliates.

(b)

Cash distributions from DCIP, which were recorded as a reduction of the Company’s investment in DCIP.

(c)

Cash distributions received from equity investees, other than those from DCIP noted above, that were recorded as a reduction of the respective investment balances.

(d)

Non-cash expense included in general and administrative expenses.

 

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